9: Consider an American put option on a stock, with a $66 strike and 1-year to expiration. The stock has a continuous dividend yield of 2%, and its current price is $50. Suppose the volatility of the stock is 10%. The continuously compounded risk-free interest rate is 6%. Use a three-period lognormal tree to calculate the following: (a) The payoff at time 2: Up movement. (b) The payoff at time 2: Middle movement. (C) The payoff at time 2: Down movement. (d) The payoff at time 1: Up movement. (e) The payoff at time 1: Down movement. (f) The option cost at time 0. (A) 10.56 (B) 7.56 (C) 9.56 (D) 6.56 (E) 8.56 (a): Select 1 Part (a) choices. (A) 18.82 (B) 14.82 (C) 16.82 (D) 15.82 (E) 17.82 (b): Select 1 Part (b) choices. (A) 19.40 (B) 16.40 (C) 20.40 (D) 17.40 (E) 18.40 (c): Select 1 Part (c) choices. (A) 9.41 (B) 11.41 (C) 10.41 (D) 12.41 (E) 8.41 (d): Select 1 Part (d) choices. (A) 20.25 (B) 17.25 (C) 19.25 (D) 21.25 (E) 18.25 (e): Select 1 Part (e) choices. (A) 14.00 (B) 17.00 (C) 16.00 (D) 15.00 (E) 13.00 (f): Select 1 Part (f) choices. 9: Consider an American put option on a stock, with a $66 strike and 1-year to expiration. The stock has a continuous dividend yield of 2%, and its current price is $50. Suppose the volatility of the stock is 10%. The continuously compounded risk-free interest rate is 6%. Use a three-period lognormal tree to calculate the following: (a) The payoff at time 2: Up movement. (b) The payoff at time 2: Middle movement. (C) The payoff at time 2: Down movement. (d) The payoff at time 1: Up movement. (e) The payoff at time 1: Down movement. (f) The option cost at time 0. (A) 10.56 (B) 7.56 (C) 9.56 (D) 6.56 (E) 8.56 (a): Select 1 Part (a) choices. (A) 18.82 (B) 14.82 (C) 16.82 (D) 15.82 (E) 17.82 (b): Select 1 Part (b) choices. (A) 19.40 (B) 16.40 (C) 20.40 (D) 17.40 (E) 18.40 (c): Select 1 Part (c) choices. (A) 9.41 (B) 11.41 (C) 10.41 (D) 12.41 (E) 8.41 (d): Select 1 Part (d) choices. (A) 20.25 (B) 17.25 (C) 19.25 (D) 21.25 (E) 18.25 (e): Select 1 Part (e) choices. (A) 14.00 (B) 17.00 (C) 16.00 (D) 15.00 (E) 13.00 (f): Select 1 Part (f) choices